If you’ve ever dreamt of owning a piece of paradise, Thailand might be the place for you. Nestled in Southeast Asia, Thailand welcomes foreigners with open arms. Today, we’ll explore why Thailand is the go-to destination in Southeast Asia for property investment. From beachfront villas to city condos, Thailand has something for everyone.

So, let’s delve into the world of Thai real estate and why it’s worth considering for your next investment.

The Different Benefits of Investing in Thailand Property

Strategic Location

Located in the heart of Southeast Asia, Thailand is a gateway to many other countries in the region. This makes Thailand an excellent location for your next property investment. Especially if your investment property has access to amenities such as good transportation. Also, Thailand has a large population and a growing economy, which makes it a great investment opportunity.

Growing Economy

Thailand’s property investment landscape shines brighter thanks to its growing economy. While affected by the COVID-19 pandemic, the economy has managed to bounce back. Foreign investors can tap into a resilient property market poised for long-term growth. This makes Thailand an enticing destination for property investments.

Diverse Property Options to Choose From

From houses to condos and villas, Thailand offers a wide array of property options to choose from. Both regular customers and property investors. Some may stand out more than others. Such as serviced residents. Or houses and condos that have access to lots of different amenities. Some condos with unique shared facilities such as smart parking or onsen pools are very attractive to potential renters. So they will present a good investment opportunity.

Rich Culture and History

Part of what makes Thailand an excellent opportunity for property investments is its rich culture and history. Thailand is home to lots of temples, museums, and other cultural sites. These factors make Thailand attractive to tourists. Many of them then progress from holidaymakers to expats and retirees. Thailand's rich and diverse culture is Thailand's unique selling point. It's what makes Thailand a great option for property investors.

Strong Rental Market

Thailand also has a strong rental market for Thai locals, tourists, and expats. This makes Thailand an excellent option for property investors.

Short-term rentals are an option for some properties (but not all properties allow this). This means investors can access the tourist market. Plus Thai locals and expats are a key long-term rental market. 

A property investor can, with the right strategy, access each of these markets in Thailand.

For Foreign Buyers: What to Watch out For

Foreign Property Ownership Restrictions

Thailand has its own set of regulations when it comes to property ownership. You may have heard of the prohibition of foreigners owning land in their own name. Or that foreigners’ condo ownership must not exceed the given 49% limit as per the 51/49 ownership quota.

But, there is hope! You can buy a leasehold property, set up a Thai company, or buy a Thai property under the name of your Thai spouse upon marriage. If that is an option for you.

Potential Language Barrier

Depending on who you talk to, the language barrier may be an obstacle to your property investment in Thailand. Due to the majority of Thais speaking Thai, many foreigners may find Thai language difficult to understand.

But, you have options even if you do not speak Thai. Some Thai properties may also offer the option for you to contact them in English. PropertyScout's dedicated team can communicate with you in many languages. 

So language may not be as big a barrier as you think.

The cost of investing in a property in Thailand

For quality properties, starting prices range from 100,000 to 140,000 USD (approx. 3,700,000-5,000,000 THB). For villas in Thailand, the starting price is around 200,000 USD (approx. 7,300,000 THB).

Bottom Line

In conclusion, Thailand is a land of opportunity for property investors. Its diverse options, welcoming atmosphere, and post-pandemic economy paint a promising picture. Whether it’s the shores, urban centers, or countryside, Thailand has something for everyone. So, if you’ve been pondering your next move, remember that your property dreams can become reality. Start your journey today and let Thailand’s vibrant charm be your guide to a prosperous future in real estate.

If you’re planning your next property investment, why not do it with us? Get in touch with us today to make sure your investment is worth every penny!

Phuket, Thailand, 27/09/2023 -  ISP Group (International School Partnerships) recently acquired BCIS Phuket (Berda Claude International School). PropertyScout Commercial, a leading commercial real estate agency, and M&A advisor, played a crucial role in the process.  Their collaboration with leading private equity consultant Corevarion and Blue Whale Assets was instrumental in finalizing the deal. 

This acquisition combines the capabilities of BCIS and ISP Group. The long-term goal is to enhance educational standards in Thailand and around the world. 

Key aspects of this acquisition include: 

• Under the management of ISP Group, BCIS will have access to access greater resources. Providing a more comprehensive learning environment for students.

• The acquisition integrates BCIS into ISP Group's international educational framework. Giving students access to a wider range of educational and cultural experiences.

• ISP Group’s established educator advancement programs will give BCIS faculty members more professional development opportunities.

• Both BCIS and ISP Group share a commitment to the community. This shared vision will continue to be a priority.

• With ISP Group at the helm, BCIS will see improvements in teaching methodologies, technology, and curriculum.

Spencer Roberts, Senior Vice President of PropertyScout Commercial, said the deal "Shows our strengths as both an M&A advisor and as a commercial broker in Thailand. We have local market knowledge that can provide crucial insights to global companies looking to access South East Asia."

About PropertyScout Commercial

Established as a subsidiary of real estate platform PropertyScout, PropertyScout Commercial specializes in commercial real estate transactions. PropertyScout Commercial also provides M&A advisory services in Thailand. PropertyScout Commercial is the ideal partner for companies looking to build a presence in Southeast Asia.

Visit https://propertyscout.co.th/en for more information.

Press Contacts

Email: marketing@propertyscout.com

Tel: +66 92 264 3444

If you've been to Thailand you will know how easy it is to fall in love with the place. The culture and food have captivated foreigners for decades. So many people decide to try and buy a condo here.

But, there’s a catch – the 49% foreign ownership quota for condominiums. Whether you’re an investor or you’re curious, join us as we demystify the 49% limit.

What is the 49% Condo Ownership Quota for Foreigners?

While it is possible by law for foreigners to buy property in Thailand, there are rules and regulations to overcome. The most notable regulation is that foreigners can only own up to 49% of a condo building in Thailand while the other 51% must remain Thai-owned. The total number of foreign-owned condo units must not exceed the 49% quota. If you are buying a condo from a Thai owner, make sure to check and verify that the condo has not reached its foreign ownership limit yet.

The other regulation to be aware of is around payment for the condo. You must pay for the condo in the form of foreign currency.

These rules and regulations shouldn't be too much of an issue for foreigners looking to buy condos in Thailand under their name. But, if the condo you want has reached the 49% foreign ownership limit or you do not want to pay in foreign currency, you can buy under the name of your Thai spouse.

The Condo Buying Process

Know your Rights and your Obligations

Being a foreigner in Thailand, it's important to take note of the various laws and regulations on buying condos or properties overall. For best results, it's recommended you consult a lawyer and have them accompany you during the condo buying process for safety. Make sure, also, that the building is condominium act-registered, which will allow you to register it under your name. Remember to also read through the contract in detail to understand the terms and conditions.

Know the Timeframe

Depending on the developer and transaction complexity, the condo-buying process in Thailand may take several months. You may also need to sign off reservation, sales & purchase, and ownership transfer contracts.

Gather up Documents

• Contract: The contract should have all the terms and conditions of the sale. This includes the price, payment schedule, and ownership transfer.
• Foreign Exchange Transaction (FET) Form: This is for transferring money to Thailand for buying the condo. This document is for large foreign transactions and serves as proof of foreign currency transfer to Thailand.
• Personal Documents: You will need the following documents for identity verification.
  • For Foreigners buying the property on their own-
    • Copy of Passport.
    • Copy of Visa or Immigration stamp in Thailand.
    • Residence Certificate (if any).
    • Non-Thai Identity card (if any).
    • House Registration (Tabien Baan, if any).
  • For Foreigners buying the property under the Thai spouse's name-
    • Copy of both individuals' passports.
    • Copy of both individuals' Thai immigration stamp of Visa.
    • Copy of Marriage Certificate. If registered outside of Thailand, make sure to get the document translated and legalized in Thai via an accredited translation center.
    • Spouse consent letter

Read More:

Decide on your Financing Options

If you need financing to aid with buying a condo, there are options such as bank loans or developer financing. Be sure to research such options in detail to see which option would be most appropriate for you. Note that Thai banks have strict policies which require your permanent resident status before they consider offering you a loan. For loan applications, consult a real estate agent for assistance.

Know your Taxes and other Expenses

• Transfer Fees: 2% of registered property value.
• Stamp Duty: 0.5% of registered property value. You must transfer these two fees to the Land of Department in Thailand. These fees are non-negotiable and the payment is the buyer's responsibility.
• Withholding Tax: 1% of registered property value or appraised value, depending on which is higher. Withholding Tax applies if property seller is a company. The tax is deducted from the seller's proceeds and you are responsible for paying the tax to the Revenue Department.
• Legal Fees: This varies depending on the transaction complexity and lawyer's rates.
• Home Inspection Fees: Home inspection fees cover the due diligence report. This document records the property's condition and status before buying.
• Sinking Fund or Maintenance Fees: Some developers charge sinking fund or maintenance fees. This is for regular maintenance and upkeeping of the building's common areas. The fee may be charged on a monthly or yearly basis.

Deposits and Payments

For your condo unit reservation, you will need to leave a 10 to 20% of the price. The remaining balance is often paid via installment plans while the final payment is due upon ownership transfer. Remember to only pay the developer or seller and not any third party. Note that when transferring money for buying a condo in Thailand, send the money as your default currency first and have it converted to THB via a Thai bank.

Get your Yellow Tabien Baan (House Registration) booklet

When you have fulfilled all payments, you will then get a yellow Tabien Baan or house registration booklet (whereas the booklet will be blue for Thai citizens).

Alternative: Buying Leasehold Property

One alternative is to buy a leasehold property. Leasehold is where the maximum lease on land period is 30 years. You can also renew at least twice in addition to the starting 30-year period, which makes the total lease period 90 years.

A Leasehold may not grant you complete ownership rights like a freehold. But it does offer the leaseholder exclusive rights to the use of that property at least. Leasehold rights are on the title deed and will allow you to enjoy your property without the hassle or ongoing paperwork.

Buying leasehold property might be a viable option for retirees searching for holiday homes in Thailand.

Alternative: Set up a Thai Company to buy a Property

Some buyers might prefer greater ownership rights without the confines of leasehold agreements. In this case, foreigners can set up a Thai company in hopes of buying a Thai property. If 51% of the company is Thai-owned, setting up a Thai company should allow for indirect ownership and control.

Alternative: Marrying to a Thai Spouse

The other alternative to buying a property in Thailand for foreigners is marrying a Thai spouse. By marrying a Thai spouse, you get to settle down, start your family, and get a place to call home all in one go. Be reminded, though, that the property bought will be under your Thai spouse's name even though it was your intention to buy the property. Thus, the Thai spouse reserves the rights to sell, mortgage, exchange, or transfer the property without consent from you as the foreigner.

Final Verdict

In conclusion, Thailand’s 49% foreign ownership quota for condos may seem like a daunting task. But, with the right knowledge and guidance, it’s a challenge that can be overcome.

Understanding these regulations is your key to property ownership in Thailand. Whether you're buying a dream home or considering an investment.

Remember, it’s not about what you can’t do, but what you can achieve with a little effort and insight. So, take that first step, explore the possibilities, and embark on your journey to make Thailand your home.

Are you a foreigner looking for a new place to call home for your family? Are you looking to invest in a Thai property? Get in touch with us today to begin your next chapter!

Developers given warning regarding unsold homes

Kasikorn Research Center warned developers to be more mindful of launching new projects. This is due to large amounts of unsold properties, rising costs, and declining population. Challenges affecting the real estate market range from less demand to high interest rates on loans. The center also speculated that the number of residential unit transfers in Bangkok would drop by 7.8%.

For More Information: https://www.bangkokpost.com/property/2645382/developers-warned-over-unsold-homes

Calls for measures to boost Chiang Mai's Housing Market

According to developers, Chiang Mai's housing market could recover next year. But, the government should provide measures to enhance purchasing power. Mr. Soranand Sethi, president of the Chiang Mai Real Estate Association, said Chiang Mai saw a gradual recovery thanks to tourism revival. Outside of lower unemployment rates and stable inflation rates, housing demand is on an upward trend. Yet, household debt has a major impact on getting mortgages.

For More Information: https://www.bangkokbiznews.com/property/1088322

The 4th Amendment of the Bangkok City Plan

After its 4th amendment, the Bangkok City Plan features detailed information on land usage based on land use types. The master plan consists of open space areas, transportation and delivery projects, public utilities, and services. Also included are natural resources and environmental areas as well as a water map.

For More Information: https://www.thansettakij.com/real-estate/576045

Bangkok Metropolitan Administration streamlining construction permit procedures to cut corruption

Mr. Wisanu Sapasomphol, Deputy Governor of Bangkok (BMA), held a meeting focused on improving the Bangkok construction permit process. They discussed simplifying the steps and reducing the influence of officials' decisions. The goal is to make operations more transparent, leading to quicker and fairer results. They hope to launch an online permit system by the end of 2023. Making it easier for everyone to apply for construction permits in the city.

For More Information: https://www.thansettakij.com/real-estate/575535

MontAzure and Botanica Luxury Phuket Team Up

MontAzure and Botanica Luxury Phuket announced a collaboration this week.

Taking advantage of a property purchasing boom in Phuket, primarily driven by Russian nationals, the collaboration aims to deliver villas priced 49-170 million baht on Kamala Beach.

The new project, called Botanica MontAzure is worth 2.6 billion baht.

"After acquiring the 454-rai plot in 2012, we began the development of MontAzure on this land in 2016, with the aim of becoming a global destination," said Setthaphol Boottho, executive director of MontAzure.

For More Information: https://www.bangkokpost.com/property/2648753/partners-co-develop-phuket-villa-project

Siam Piwat Plots Global and Local Expansion

Siam Piwat, Thailand’s leading destination retail developer, has outlined its local and global growth plans.

After announcing strong operating results, which showed a 25% year-on-year increase, Chadatip Chutrakul, chief executive officer of Siam Piwat Group, spoke of expansion plans.

"Since we are creating a five-year strategic plan in addition to domestic expansion, the company's board of directors also approved further study on expansion in selected countries in Asia,” said Mrs Chadatip. “We expect to be able to complete and unveil the expansion plan in early 2024."

For More Information: https://www.bangkokpost.com/business/general/2649871/siam-piwat-sets-out-global-growth-plans

New Government Policies Boost Phuket Real Estate

Funds are surging into Phuket from Thailand’s largest property developers, pushing annual investment to over 100 billion baht according to the Phuket Real Estate Association.

The rapid recovery of the province’s tourism industry is fueling investment in new real estate developments, the association said.

Phattanan Pisutwimol, President of the Phuket Real Estate Association, said the government’s decision to offer free visas to Chinese tourists will bring even more visitors to Phuket. “The real-estate sector will benefit from increasing business the longer foreigners stay in Thailand.”

A wave of land purchases by development giants has caused prices in prime locations like Patong Beach, to climb to 15-250 million baht per rai (1600 square meters).

For More Information: https://www.nationthailand.com/business/property/40031090

Foreign Demand for Condominiums Increases

Foreign demand for condominiums in Thailand continues to increase, with 24.6% of total transfer values nationwide in the first half of 2023 coming from foreign buyers. Up from 20.5% in 2022.

Chinese buyers lead the demand, picking up 3,488 units out of the total 7,338 units purchased by foreigners.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said "Condo demand from Thais remains sluggish. To boost the economy, the government should promote condo purchases targeting foreigners. This could involve raising foreign ownership quotas in certain areas such as Pattaya and Phuket,"

For More Information: https://www.thansettakij.com/real-estate/576469

Welcome to the land of pristine beaches, street markets, and delicious food - Thailand! As you embark on your journey, one aspect you'll want to master is transferring money in and out of the country. Fear not, because in this blog post, we're going to break it down for you in simple terms that you can understand. Get ready to make banking in paradise a breeze!

Understanding Transferring Money in and out of Thailand

Bringing money into Thailand is simple provided you have the right documentation. You will need proof of inbound fund transfer from the issuing bank with the specific purpose. Examples of the purpose include funds for long term stay or buying property. You will then receive an FET (Foreign Exchange Transaction) form as a supporting document from the bank.

Read More:

As for transferring money overseas, you will need the following:

• Recipient's account name and number.
• Recipient's bank name and address.
• Currency and amount of money.

If you are a foreigner sending money into your home country, you may need extra paperwork. These include an employer's proof of income letter or a document explaining the source of your funds.

Exchange Control Regulations

Rules and Regulations

The exchange control in Thailand comes from Exchange Control Act (B.E. 2485) Ministerial Regulation No. 13 (B.E. 2497) issued under the Exchange Control Act. These regulations establish the principles of controls. They serve as the foundation for notifications by the Ministry of Finance and directives from Competent Officers.

Administration

The Bank of Thailand (BOT) administers foreign exchange. The governor of the Bank of Thailand must appoint the BOT's officials as the competent officials as per Exchange Control Act (B.E. 2485).

Individuals must conduct all foreign exchange transactions via commercial banks and authorized non-banks. Authorized non-banks must have foreign exchange licenses from the Minister of Finance. These include authorized money changers, transfer agents, and companies. Transactions not conducted through the aforementioned licensees need approval from the Competent Officer on a case-by-case basis.

Currency Regulations

Foreign Currency

You can transfer foreign currencies into Thailand as much as you would like.

Individuals who receive foreign currency from abroad have an important obligation. They must return these funds to Thailand. They can sell the foreign currency to or depositing it into a foreign currency account at an authorized bank. It's crucial to complete this process within 360 days from when they first received the money. Note that this rule doesn't apply to everyone.

Exemptions include the following:

• Foreigners who are temporarily staying in Thailand for three months or less.
• Foreign embassies.
• International Organizations (and their staff with diplomatic privileges and immunities).
• Thai emigrants with permanent residency or overseas employment.

Any individual bringing up to 20,000 USD (or its equivalent) in or out of Thailand must report to a customs officer.

Local Currency

You can bring Thai baht banknotes into the country without any limitations. When traveling to Thailand's neighbors, such as Vietnam, you're permitted to carry up to THB 500,000. For other countries, you can take up to THB 50,000 without needing special authorization.

Thai banks in which you can do International Fund Transfer

• Siam Commercial Bank (SCB)
• Bangkok Bank
• Kasikorn Bank (K Bank)
• Krungsri Bank
• Krungthai Bank (KTB)

Fees vary from bank to bank depending on the following factors:

• Destination country.
• Your type of account (personal banking or business banking).

For More Information

Swift Codes for Thai Banks

For transferring money of Thailand, you will need a SWIFT code if you're doing so via Thai banking apps. SWIFT codes are 8-digit codes for the recipient's bank which ties in with the sort code and account number.

The following are SWIFT codes associated with notable Thai banks:

• Krungthai Bank: KRTHTHBKXXX
• Bangkok Bank: BKKBTHBKXXX
• Siam Commercial Bank (SCB): SICOTHBKXXX
• TMB-Thanachart Bank (TTB): TMBKTHBKXXX
• Kasikorn Bank (KBank): KASITHBKXXX
• United Overseas Bank (UOB): UOVBTHBKXXX
• Krungsri Bank: AYUDTHBKXXX

How to get your THB Transfer marked as International Transfer by the Recipient Bank

Assume the recipient bank is Kasikorn or Bangkok Bank:

1. Set the currency and transfer amount to THB.
2. Fill in the Recipient Details.
3. Choose Kasikorn or Bangkok Bank as the recipient bank.
4. Fill in the account number.
5. When you get to the transfer purpose, select Funds for long-term stay in Thailand or Purchase of Property.
6. Review the transfer details and confirm the transfer.
7. Select the pay-in method and pay the transfer.

Transferring money into Thailand through WISE

To transfer money into Thailand through Wise, here's what you will need:

1. Sign up online via the Wise app for free using a Facebook or Google account, or an email address.
2. Once you pick how much money you would like to transfer, you will then get a display of upfront fees and the estimated money arrival timeframe.
3. Next up, fill in the details of your recipient's bank account.
4. For certain currencies or large transfers, there may be an extra step involving identity confirmation. In that case, you will need a photo of your ID.
5. Send the money through a bank transfer, or a credit/debit card, and you're done!

Once you transfer the money, the recipient will get notifications on the estimated money arrival date. You will also be able to track the progress through your account.

For More Information:

Bottom Line

Whether you're a traveler or you're managing cross-border finances, the takeaways are clear. Understand the rules, work with authorized banks, and stay informed. With these insights, banking in paradise becomes a breeze. So, go ahead and embark on your financial journey with confidence. Let your money flow in this enchanting corner of the world. Cheers to hassle-free international banking in Thailand!

Welcome, expats and abroad students alike! Click the links below to make your next move with us today!

In Thailand's real estate market, a revolution goes by the name of "Proptech." Picture a world where technology merges with the world of property. This makes buying, selling, and managing real estate as easy as a few taps on your smartphone. In this blog post, we'll explore how Proptech reshaping the way people find, own, and enjoy their homes. So, get ready to dive into the future of real estate, where innovation meets convenience!

What is Proptech?

Proptech is a portmanteau of Property and Technology. This involves using data and technology to make real estate work better. It helps with keeping track of customers, managing leads, and handling property listings. The use of technology also made the real estate business easier and faster.

But it's not only for real estate brokers or companies. Sellers, agents, and property managers can also use proptech. It helps them access and take care of their properties with greater efficiency.

For instance, there are apps and tools that help manage customers. They let you see what customers want and share that information with your team or manage it yourself. This helps you respond to customers in time and increases your chances of making sales.

Innovative Examples in Proptech

Big Data

Big data is changing the real estate world. It collects information from different places and uses it. This helps businesses plan to give customers what they want. Assume there are people searching for houses on a website. You can see who they are, what they like, and which pages they visit the most. You can use this info to update and improve the website over time.

IoT

The Internet of Things (IoT) links everything to the internet. It lets us manage and check devices from anywhere, at any time. For instance, you can use a phone app to switch your air conditioner on or off or keep an eye on your home appliances. Today, lots of companies create apps adding convenience to customers. Such convenience offered from these apps include door locking and light switching. Another example is the option for customers to communicate with caretakers 24/7.

Machine Learning

Machine learning is where AI learns and looks at types of data. There are systems from Meta (Facebook), that can look for people, animals, or items in pictures. This tech can see if there's furniture, appliances, or other stuff in property photos. It makes it faster for real estate agents to list what's in a house or condo they want to sell.

Blockchain

Blockchain isn't only about cryptocurrencies, it takes real estate to a new level. With smart contracts, agreements buying, selling, or renting become quick, safe, and easy. This lowers the chances of fraud or mistakes when dealing with contracts.

How is Proptech Beneficial in Real Estate?

Data for Informed Decision-Making

Proptech help agents, brokers, firms, and property companies in gathering and analyzing data. This allows users to study market trends, understand buyers, and analyze competitor strategies. All the collected data saves users the time and effort of manual data search and collection.

Accessible Data

Cloud databases help real estate professionals like agents, brokers, and property companies. They can save customer data for later analysis and creating new services. They can also keep documents on cloud servers accessible from anywhere online. This makes it easy to check transactions for accuracy and status. Plus, it cuts document storage costs while making work flexible and convenient.

Higher Chances of Closing Sales

Many real estate businesses now embrace proptech by developing websites and apps. They post online, making it easier for customers to find properties they love. Some also offer 3D virtual tours using VR technology. This allows customers to explore properties in detail without actually being present. This provides an impressive experience and boosts the chances of closing sales.

Effective Customer Communication

Proptech makes communication with customers fast and smooth throughout the process. Real estate agents or staff will know when customers reach out through apps and chatbots. Customers receive initial explanations about their questions. Should there be specific inquiries, this is where the related staff comes in.

Bottom Line

With Proptech, the real estate market becomes more accessible and efficient than ever. From helping buyers to agents, Proptech is the key to the future for all players in the real estate game. As Thailand embraces the digital revolution, it's an exciting time to be part of this industry.

Your next move lies in your fingertips, feel free to put your hand up if you have any inquiries! Our property consultant team will be very happy to assist you.

Hey there, budding real estate enthusiasts! Today, we’re diving into the exciting world of Cash on Cash Return. Cash on Cash Return is a vital concept in the realm of real estate investing. But don’t worry, we’ll break it down into simple language you can understand. Imagine you’re unlocking the secrets of growing your wealth through real estate.

Cash on Cash Return is your trusty guide, showing you the path to financial success. So, grab your notepads, because class is in session, and we’re about to make real estate investing a piece of cake!

What is Cash on Cash Return?

Cash on Cash Return is the rate of return used in real estate transactions. This rate calculates the cash income earned on the cash invested in a property. It’s like figuring out if your property is making you money or costing you money each year.

Cash on Cash Return Formula

Cash on Cash Return = (Annual Cash Flow (pre-tax)/Total Cash Investment)

Steps in Calculating Cash on Cash Return

1. Calculate your Monthly Cash Flow.
2. Convert from Monthly to ANNUAL Cash Flow.
3. Add up your Total Cash Investment.
4. Divide Annual Cash Flow by Total Cash Investment.
5. Multiply the result by 100.

Example

1. Start by figuring out your monthly cash flow. Add up all the money you get from things like rent, deposits, or extra fees. Then, subtract all your monthly expenses, which might include your mortgage payments. For instance, if you earn ฿67,580 in rent and pay ฿54,064 in expenses, you're left with ฿13,516 each month.
2. To find your annual cash flow, multiply your monthly cash flow by 12. Using the example above, that would be ฿162,192.
3. Now, tally up all the cash you put into the property, like the down payment, closing costs, and any repairs or improvements. If you bought a property for ฿8,447,500, made a 25% down payment of ฿2,115,625, had ฿236,930 in closing costs, and spent ฿118,465 on repairs, your total initial cash outlay would be ฿2,471,020.
4. Calculate your cash on cash return by dividing your annual cash flow by your total cash investment. In this case, divide ฿162,192 by $73,000 (฿2,471,020). This results in around 0.0658.
5. To make the result easier to understand, multiply the result by 100. In this case, multiply 0.0658 by 100. This should give you 6.58%.

Cash on Cash Return = (Annual Cash Flow (pre-tax)/Total Cash Investment)

Cash on Cash Return = (162,960/2,471,020) X 100

Cash on Cash Return = 0.0658 X 100 = 6.58%

Why Cash on Cash Calculation Matters

• Quick Mortgage Assessment: Cash on Cash return helps you determine if your condo can cover its mortgage costs. By comparing annual income with total cash investment, you can predict how much money you'll get back.
• Effective Investment: Cash on Cash return provides accurate investment return information.
• Long-term Planning: This formula isn't limited to the initial phase. When you're assessing your investment plan, this tool considers all costs, including maintenance. For better returns, make sure your investments match your goals and how much risk you're okay with.

What makes a good Cash on Cash Return?

A good cash on cash return varies based on the country. It may be influenced by interest rates, economic stability, regulatory conditions, and local real estate market dynamics.

Final Verdict

In conclusion, understanding Cash on Cash Return is your key to success in the world of real estate. By following the steps, you can make good decisions for a prosperous real estate journey. Happy investing, and may your real estate ventures be as rewarding as they are exciting!

Start your real estate investment journey today, by making your next move with us!

Are you thinking about investing in property in Thailand? Well, you’re in for an exciting journey! One important thing to understand is Net Operating Income, or NOI for short. NOI can make your property investment in Thailand worthwhile. In simple terms, it’s the money your property makes after covering all the expenses. Imagine it as the profit you earn from your investment. In this blog post, we’ll break down NOI and share some tips to help you make your investment in Thailand worth it. 

What is Net Operating Income (NOI)?

Net Operating Income measures the profitability of your property investment that generates income. This involves deducting expenses from your property’s income. These expenses include insurance, legal fees, utilities, property taxes, maintenance, and cleaning. NOI calculates your earned profit, cash return, and the expected total return.

Note that NOI doesn’t include loan payments, interest, big expenses, depreciation, and amortization.

Profits Generated by Property

Assume you are a condo owner in Thailand. Profits earned from your condo asset could come from the following:

• Rental Income: Rent collected from tenants on a monthly basis.
• Parking Fees: Revenue earned from parking spaces.
• Laundry service: Income from coin-operated laundry services.

Operating Expenses for Property

Operating expenses are the costs of running and maintaining the property. Which might include the following:

• Property Management Fees: Compensation from property overseeing and managing.
• Utilities: Electricity, water, gas, and other essential services.
• Maintenance & Repairs: Regular care or maintenance along with complete repairs on the property.
• Property Taxes: Annual tax payment to local authorities.
• Premium Insurance: Coverage for possible risks and liabilities.
• Landscaping: Maintenance on the property's exterior appearance.
• Advertising & Marketing: Promotion fees for advertising the property.

Net Operating Formula

Net Operating Income (NOI) = Total Real Estate Revenue - Operating Expenses

Total Real Estate Revenue includes income from rent and amenities. Operating Expenses consist of operational costs such as maintenance, utilities, and property taxes.

Calculation Example

Example 1

Let's say a villa in Phuket has 3 bedrooms and a monthly rental price of 60,000 baht.

• Rental Income: 720,000 baht/year (which is 60,000 baht/month).
• Other income: Assume there is an additional 10,000 baht income from amenities.
• Operating Expenses:
  • Property Management- 15,000 baht/year.
  • Insurance- 5,000 baht/year.
  • Property Taxes- 8,000 baht/year.
  • Utilities- 12,000 baht/year.
  • Repairs & Maintenance- 20,000 baht/year.
  • Other- 5,000 baht/year.

Now, let's bring back the Net Operating Income formula.

Net Operating Income (NOI) = Total Real Estate Revenue - Operating Expenses

NOI = (720,000 + 10,000) - (15,000 + 5,000 + 8,000 + 12,000 + 20,000 + 5,000)

NOI = 730,000 -65,000

NOI = 665,000 baht/year

So, in this case, the Net Operating Income is 665,000 baht/year.

Example 2

Imagine there is a villa in Pattaya with 3 bedrooms and a monthly rental of 52,000 baht.

• Rental Income: 624,000 baht/year (which is 52,000 baht/month).
• No additional income in this case.
• Operating Expenses:
  • Property Management- 15,000 baht/year.
  • Insurance- 5,000 baht/year.
  • Property Taxes- 8,000 baht/year.
  • Utilities- 12,000 baht/year.
  • Repairs & Maintenance- 20,000 baht/year.
  • Other- 5,000 baht/year.

Let's bring back the Net Operating Income formula again.

Net Operating Income (NOI) = Total Real Estate Revenue - Operating Expenses

NOI = (624,000) - (15,000 + 5,000 + 8,000 + 12,000 + 20,000 + 5,000)

NOI = 624,000 -65,000

NOI = 559,000 baht/year

The Pros and Cons of Net Operating Income (NOI)

Pros

• Allows investors to determine a reasonable value for income-generating properties.
• Lets investors know what to expect from ongoing revenue.
• Helps lenders consider whether or not the property is a risky investment.

Cons

• Possible Inconsistencies depending on the property management.
• Negative impact on NOI if projected rents turn out inaccurate.
• Potential incorrect calculation from investors if they overestimate rental revenues.

Bottom Line

By understanding NOI, you can make your investment worthwhile. Remember, NOI shows you the profit you can expect after covering the essential costs. With the right knowledge and strategy, your property investment in Thailand can thrive. So, go out there and explore the opportunities!

First time investing? Or are you experienced? Click the links below to start your property investment journey with us today!

Picture this. You've bought your dream home, but something happens. Your neighbor has built a massive fence that blocks your view. Or you’re facing a disagreement with a family member over property inheritance. These kinds of situations can be a nuisance. But fear not! This is where a lawyer comes in. So, let’s get started on your journey from property feuds to the freedom and peace of mind you deserve.

Understanding Property Disputes

Property disputes can occur due to misunderstandings or a party’s lack of cooperation. Examples include ownership disputes or trespassing. In any case, we recommend you enlist the help of a lawyer. That way, they can guide you through the dispute in the best way possible.

Cases of Property Disputes in which you will need help from a Lawyer

Unfinished Projects due to Delayed Construction

Certain projects such as condos or villas may not finish their construction in time. In most cases, you can request a contract termination with a refund or strike a new deal with the project. If the project doesn’t refund your money, you have the right to sue the project as a last resort. Be mindful, though. The lawsuit may take time. Lawyers, and the Office of the Consumer Protection Board all have a heavy workload. Which can delay matters.

Read More:

Ownership Disputes

Ownership disputes can happen for various reasons. Examples include inheritance disagreements or false ownership claims. A lawyer can help guide you through this tricky situation. They’ll check documents and agreements, and figure out who owns what. If needed, they can also help you go to court to fix the issue.

Encroachment

Let’s say your neighbor builds a fence that extends into your house. Or, for something bigger, a tall building blocks nearby houses and properties. This is a common occurrence in rural areas of Thailand involving agricultural land. Enlisting the help of a lawyer will help address the situation. With a lawyer, they can review property records and navigate the zoning regulations.

Section 1312: Good Faith Encroachment

If someone builds a structure on someone else's land without knowing it's not theirs, they can become the owner of the building. But, they must compensate the landowner for using the land and record their rights to use the encroached area as a servitude. If the building is completely destroyed later on, the landowner can ask to remove the recorded rights.

Section 1311: Bad Faith Encroachment

If someone built on someone else's land without permission, they must return the land to its original state unless the landowner decides to keep it as is. In that case, the landowner can choose to either pay for the building or pay an amount equal to the land's increased value.

Contract Breach

A contract breach is self-explanatory.It's where one party does something that breaches or violates the agreed terms of the contract. Such disputes can result from building specifications, payments, or other terms and conditions. But here’s where the lawyer comes in. Some lawyers are experts in contract law. They’ll check the contract and see if the other person followed the terms or not. Then, they’ll help you figure out what to do next. Sometimes, it means talking to the other party and working out a solution. Other times, it might involve going to court.

Landlords and Tenants

Landlords can sue a tenant in the event of continued delays in rent payment. Tenants can also sue the landlord if the former attempts to cut their electricity or lock them out in the event of a late rent payment. In both cases, a lawyer will make sure everyone plays by the rules and that you’re treated with fairness.

Sometimes, tenants might have a tough time paying rent on time, and it becomes a problem. In some cases, the landlord might sue tenants for property damage or continued cases of noise disturbance. When it’s the last resort, a landlord might decide to sue. Think of the lawyer as a problem solver. They’ll look at the rental agreement, the payment history, and the laws in your area. If the tenant hasn’t paid, the lawyer can help the landlord take the right legal steps. This might involve going to court. It’s like having a rulebook to make sure everyone follows the rental rules.

If your landlord attempts to evict you with force even though your rent is late, a lawyer can be your advocate. They’ll check your situation and agreement, then figure out if the landlord broke any laws. If they have, the lawyer can help you take legal action to protect your rights as a tenant. It’s like having a guardian to ensure your living conditions are safe and fair.

Trespassing

Trespassing is when one breaks into a private property without the owner’s permission. If the trespasser does damage to the property, the owner has the right to sue the trespasser. 

As stated in Section 364 of the Trespassing Act:

Whoever, without reasonable cause, enters or hides himself in a dwelling place, store-house or office under the possession of the other person, or refuses to leave such place after having been told to do so by the person having the right to forbid him from entering, shall be punished with imprisonment not exceeding one year or fined not exceeding two thousand Baht, or both.

They’ll verify the trespasser’s innocence and intention in trespassing. If the trespassing was intentional or resulted in damage, the lawyer can help you take action. They may ask the person to leave or even involve the police if necessary.

Adverse Possession

Adverse Possession happens when a third party gains the title to a property. In this case, the legal owner does not receive compensation or engagement in any contract. The third party gains ownership rights by owning the property for a specified period of time, which conflicts with the original owner’s rights.

Section 1382 of Thailand’s Civil Commercial Code (CCC) provides a basis for the idea of Adverse Possession. It states that:

1. The property must belong to another person by title deed registration.
2. The possessor must possess it in an open and peaceful manner without intimidation or force.
3. The possession must continue uninterrupted for at least a decade.
4. The possessor must possess the property with the intention for ownership.

The lawyer will work to show that you’ve been taking care of the place and verify the owner’s abandonment. They’ll help you make your case and ensure you have a fair shot at keeping the property you’ve been living on for so long. In a way, the lawyer is your legal champion in this property ownership adventure.

Stay Protected with the help of a Lawyer

In conclusion, property disputes can cause real problems. But, they don’t have to. Knowing when to consult a lawyer can be your ticket from feuds to freedom. These legal experts are here to guide you through the twists and turns of property conflicts. They ensure people are following the rules, and your rights stay protected. So, don’t hesitate to reach out for help, and let them help you find that path to resolution and tranquility. Your property is your sanctuary, and with the right legal support, you can enjoy it to the fullest.

Stay safe and sound, make your next move with us! Just put your hand up and our property consultant team will be very happy to answer your questions.